Corruption, collusion and clientelism are pervasive legacies of Soviet rule in most successor states of the Soviet Union. This legacy has been a major obstacle to the development of viable democratic and market institutions. Analyzing the political and economic developments of Armenia and Georgia, this book demonstrates how systemic corruption undermines the rule of law which is crucial for democracy and a market economy. It argues that the tumultuous political transition of Georgia has created an anarchic system of corruption that is disastrous for economic development and people’s welfare. In contrast, the Armenian government has maintained some control over the corrupt system, ameliorating the consequences of systemic corruption.